Thursday, December 24, 2009

Smashwords Author V.J. Chambers Shares 2009 Sales Results

Smashwords author V.J. Chambers published an interesting post at her blog yesterday in which she revealed her earnings from her self-publishing efforts.

I always have great admiration for any author willing to share such data, because it helps inform other indie authors about the true challenges that lie ahead. It also takes guts for any author to admit how little most authors really make from their hard work.

All told, Ms. Chambers, an author of young adult thrillers, brought in revenue of $637.00 since starting her indie publishing adventure in July, 2009. Due to expenses associated with purchasing ISBNs and paying for certain print book services, her net profit for the year was $142.48.

What caught my eye was how the sales were distributed. She sells her titles as print books via CreateSpace/Amazon for about $13.00, and as ebooks in the Amazon Kindle store for $7.00, and as as multi-format ebooks on Smashwords for $5.00.

Considering that ebooks account for only about 3 percent of overall book industry sales here in the U.S., I assumed 97 percent of her sales would be of the print book, and then the remaining 3 percent would be divided between the Kindle store and the Smashwords store, and of course since Amazon gets at least 10,000 times more traffic that Smashwords each month, I assumed they'd sell quite a few more ebooks that Smashwords. I was wrong.

So in other words, the books at Smashwords outsold the other two. Like many indie authors, V.J. does her own marketing and operates her own website and blog. On her website, she gives all the different formats equal promotion and lets the customer decide if they want print, Kindle or Smashwords. Smart.

I asked V.J. to share her thoughts on the results above. To ensure I was viewing her results apples to apples, I also asked if all titles were available via the multiple outlets for the same period of time. Her response (excerpted):

Yes, most of the books have been available via smashwords, kindle, and amazon/createspace for the same amount of time. Only one has been available longer on createspace/amazon/kindle than it has on smashwords.

Overall, I LOVE smashwords, for several reasons. One of course is the bigger royalty I make from smashwords than I do anywhere else. This enables me to price my books cheaper, but make more money. I think the books sell better on smashwords because I sell them for cheaper. I sell kindle books for $7 and smashwords books for $5. I do this because (even at seven bucks) I only make like $2 royalty from Amazon.

Um...but your question was how do I account for the results. So...A) Smashwords books are more affordable. B) My audience clearly has no problem reading books on a computer screen, so they're willing to buy an inexpensive e-book before they'll buy a trade paperback. C) E-books trump print books in instant gratification. D) Smashwords trumps Kindle since it offers multiple ebooks formats.

I think V.J.'s results are fascinating for a number of reasons:

Lower cost books can actually help authors/publishers sell more books - Large NY publishers are fighting tooth and nail to protect higher prices for their ebooks, fearful they can't profitably run their businesses with lower cost ebooks. Many publishers are upset Amazon is helping to establish $9.99 as a price expectation among its customers for ebooks. V.J.'s experience provides one datapoint supporting my belief that publishers should consider offering some of their titles as lower cost ebooks, under $9.99. I blogged about this at Huffington Post a couple months back with my column, "Why We Need $4.00 Books."

Publishers can make more money with lower cost ebooks - Since Smashwords pays authors 85 percent of the net for sales at Smashwords.com, authors can price for less but still make more profit per copy sold. I've been talking about the virtuous economic dynamics behind low cost/high margin ebooks since we launched Smashwords 18 months ago, so I'm gratified to see the numbers play out in the real world.

It pays to offer customers choice - Any publisher, large and small, can follow V.J.'s lead by offering customers a choice of formats, prices and retailers. When customers have a choice of low cost ebooks vs. more expensive print books, the 3 percent ebook marketshare data above doesn't hold water. In the real world, if a publisher gives the consumer the choice, ebook sales represent a much higher percentage of sales than you'd expect. This actually confirms Amazon's own reported sales results: For books available in both print and Kindle format at Amazon, Amazon reports 48% of those sales go to the Kindle version. Amazing.

Ebooks can be more profitable than print books - If it weren't for her ebook sales at Amazon and Smashwords, V.J. would have lost money for the year. Print publishing can be more complicated, and more expensive, than ebook publishing.

Authors/publishers have the power to direct customers to favored retailers - As an indie author, V.J. is directly engaged with her readership, and as you can see in her web site's store, she offers links to where her customers can find her books.

Self-published books need never go out of print - At first glance, $637 in royalties may not seem like much, but annualized over a year they're closer to $1,200, and if you consider these books will never go out of print, it's quite possible she'll continue earning the same or greater income for many years to come, even if she never publishes another book. Yet she will write and publish more books, so it's more likely she'll see her earnings rise in the years ahead as she builds her readership.

I think all publishers, large and small, have a lot to learn from the indie author pioneers. The more I learn about publishing trends, the more I believe that the future of publishing truly lies in the hands of authors like V.J.

A lot more sales would evolve if all ebooks were available through the other outlets (Amazon, Sony, Barnes and Noble, Kobo wtc.) This seems to be taking some time for Smashwords to migrate its library over to these new outlets. Why is there a delay? Are there filtering processes that must be gone through on the third party sites?

Desmond, B&N is the furthest along of our retail partners. We're still working through the technical integration issues with the others, but we're getting closer by the day. I think V.J. is correct, though. Retail distribution alone isn't a panacea. It won't net you many sales unless you're out there generating demand for the titles.

I started self-publishing 5 years ago, and have made a bundle of mistakes over the years, but I am finally cruising along in the black albeit on a small scale. For 2009, my sales so far have been $2271.06 with expenses at $1,237.03 for profit of $1034.03. My ebook sales have always been stronger than print sales. I have one nonfiction title that sold in a 1:1 ratio of ebook to print this year. My fiction however has far stronger ebook sales with an ebook to print ratio of 5:1. The vast majority of my sales come through my website, www.braveluck.com. I added my fiction to Smashwords this year and I am curious to see if the broader distribution will increase sales. I saw that my titles were showing up in the B&N ebook store last week, but I'm torn about wether I should mention this on my website. It's hard for me to point a potential customer away from my site. Once all my titles have achieved complete distribution through Smashwords partners I might include links to everything through my website, but I'm still on the fence.

I hear what you guys are saying but perhaps the bookshop of the future will be more like a traditional bookshop where you will have a virtual display of books and the browsing experience will be somewhat more pleasurable than reading through an endless linear stream of titles. Self promotion is good but a lot of people choose their books by personal choice in a 'bookshop'.

I have been playing the POD game for a decade now. Although I have five books out so far, I actually made more money selling three stories to a traditional publisher than I have from all my book sales together! I have also tried just about every gambit to get my name out there. I still do not sell many books, but you can always find pages of my name with a Google search! When I had had enough of banging my head against the promotional wall back in 2006, I founded PODBRAM. I thought that if I cannot become rich, famous, and successful, I can at least feel good about myself by using my experience to help other authors!